First Franklin Financial Corp. has tapped Bank of New York to arrange $215 million in new bank loans to fund operating requirements finance the acquisition of servicing rights, according to Steve Dallas, chairman of the mortgage bank.

Separately, Bank of New York and Banc One are syndicating a $475 million bank loan for BancPlus Mortgage Corp. of San Antonio, Tex.

Bank of New York is shopping the First Franklin credit to a number of mortgage-lending specialists.

Seeks Franchise Expansion

The deal will comprise a $200 million warehouse credit -- used to fund mortgages awaiting sale -- and a $15 million war chest to buy servicing rights.

The $15 million loan is priced at 275 basis points over the London interbank offered rate. First Franklin, which is based in San Jose, Calif, wants to buy servicing rights to expand its franchise outside of California, said Mr. Dallas.

A General Trend

He said the mortgage warehouse facility will largely refinance existing warehouse lines with investment banks.

Investment banks have moved increasingly into warehouse lending over the past couple of years, often undercutting banks on pricing.

First Franklin chose a bank-led facility partly because Bank of New York was able to pair the mortgage warehouse deal with a competitively priced servicing rights acquisition facility, Mr. Dallas said.

Terms of the Deal

The mortgage warehouse credit will run for 364 days and is priced at Libor plus 162.5 basis points, according to bankers looking at the deal.

BancPlus' credit includes a $400 million mortgage warehouse loan priced at Libor plus 150 basis points.

The company also will receive a $75 million, seven-year loan to finance planned acquisitions of servicing rights, according to bankers familiar with the deal.

That credit, priced at Libor plus 250 basis points, contains a provision that may increase the deal to $100 million.

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